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| Administrative procedures concerning production and business activities under the central bank's management to be streamlined__Photo: Thanh Tung/VNA |
The Prime Minister has given a green light to a scheme on abolishment and simplification of administrative procedures concerning production and business activities under the management by the State Bank of Vietnam (SBV).
Under Prime Minister Decision 2070/QD-TTg dated September 16, procedures for establishment and operation of banks, payment and credit activities will be streamlined.
The Decision also prunes business conditions for (i) commercial banking operations; (ii) non-banking credit institutions; (iii) cooperative banks, (iv) people’s credit funds, and (v) microfinance institutions, payment and intermediary payment services, and credit information services.
With regard to procedures related to microfinance programs and projects, the grant of microfinance program and project registration certificates as specified in SBV’s Decision 20/2017/QD-TTg dated June 12, 2017, in accordance with Article 210.13 of the 2024 Law on Credit Institutions will no longer be required.
SBV is currently finalizing a draft decree for submission to the Government for replacing Decision 20/2017/QD-TTg, providing the operation of microfinance programs and projects of political, socio-political and non-governmental organizations.
In addition, procedures for granting, or modifying details of, registration certificates for microfinance projects each operating in one or two provinces or cities will be eliminated.
Regarding the stock listing by credit institutions on domestic and foreign exchanges, the Government will annul some of existing business conditions, including the minimum operation period of two years, the real value of the credit institution’s charter capital not falling below its legal capital, profitable business operation for two consecutive years, and full compliance with regulations on operational safety assurance for six consecutive months before the dossier submission.
Many financial and governance criteria, such as the bad debt ratio below three percent in two consecutive quarters, debt classification and deduction for risk provisions under regulations, requirements on the number and structure of personnel in the Board of Directors and Supervisory Board and conditions on internal audit division and system, have also been removed.
To streamline the procedures for establishing domestic branches of commercial banks, the Prime Minister has removed the condition that such commercial banks have been operating for more than 12 months.
The conditions, specified in Article 6.1.h of SBV’s Circular 32/2024/TT-NHNN (Circular 32) dated June 30, 2024, on not being subject to administrative sanctions for operation safety assurance, asset classification and deduction for risk provisions will also be eliminated.
In terms of procedures for establishment of domestic transaction offices of commercial banks, apart from Article 6.1.h of Circular 32, the new regulation also eliminates requirements that (i) units of the domestic network of commercial banks approved for establishment in the year preceding the year of application have commenced their operation, and (ii) the real value of the charter capital as of December 31 of the preceding year is not lower than the legal capital. Such conditions are new replaced with such banks’ responsibility to comply with the Law on Credit Institutions and submit to SBV’s supervision.
Under the Decision, regulations on asset classification and deduction for risk provisions, and banks’ compliance with law within 12 months prior to the date of application have been simplified. Conditions concerning the Board of Directors, Supervisory Board, Chief Executive Officer, internal audit system and control system have also been combined into a single general criterion.
The Decision also prunes procedures for merging credit institutions. Accordingly, upon their merger, credit institutions will neither have to meet the condition of “not falling into a case of prohibited economic concentration,” nor have an approved merger or consolidation scheme as specified in Article 12 of Circular 32.- (VLLF)
